Current and former California employees have a right to inspect certain employment records kept by their employer. These include the employee’s personnel file and payroll records. This article briefly discusses some of California’s employment record keeping requirements.

The Personnel File.

A personnel file is commonly understood as the collection of documents kept by an employer about a particular employee. California’s Labor Code states (1) what documents must be kept in a personnel file, (2) how current and former employees may request and inspect their personnel file, and (3) what penalties employers face if they refuse a lawful employee request to inspect their personnel file. (Cal. Lab. Code § 1198.5.)

California law does not provide much guidance for what documents must actually be included in the employee’s personnel file. However, the law does specify that the file must include “records that the employer maintains related to the employee’s performance or any grievance concerning the employee.” Therefore documents such as disciplinary write-ups, records of verbal warnings, reprimands, performance improvement plans, suspensions, performance evaluations, and termination letters must be kept in the employee’s personnel file. California also states that an employee, upon request, shall be given a copy of “any signed instrument related to the obtaining or holding of employment.” (Cal. Lab. Code § 432.) Therefore, any contracts signed by the employer and employee such as commission agreements, agreements for bonus compensation, employment contracts, signed employee handbooks, and arbitration agreements must be produced along with any request for the employee’s personnel file.

California law also provides some examples of what documents do not have to go into an employee’s personnel file including records relating to the investigation of a criminal offense and letters of reference. Law enforcement personnel also have separate rights related to the maintenance and inspection of their personnel files.

How to inspect your personnel file.

Both current and former employees have a right to inspect their own personnel files following the submission of a written request to their employer. While the law states that the inspection may be done in-person at the place of employment, the common practice is to mail or email the employee a copy of the records in lieu of an in-person inspection. Employers may elect to charge the employee for the actual reproduction costs of the personnel file (i.e. $0.10 per page).

Importantly, employers are required to produce the personnel file for inspection within 30 days of receipt of the employee’s request. Employers who do not permit the inspection face a $750.00 penalty. The employer may also be sued by the employee through a civil lawsuit or at the Labor Commissioner if records are not produced. Under certain circumstances, the employee may recover their attorney fees if a lawsuit was required to compel production of the personnel file.

Payroll Records.

Payroll records are commonly referred to as “pay stubs” and are legally referred to as “itemized wage statements”. In contrast to personnel files, California is very strict in regard to what employee payroll information must be kept by the employer.

California requires employers to provide an accurate and written itemized statement showing: (1) the gross wages earned (ithe amount before deductions) (2) the total hours worked by the employee, (3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis (the number of units sold, picked, miles driven, etc.), (4) all deductions (taxes and withholdings), (5) net wages earned (the amount after deductions are taken), (6) the inclusive dates of the period for which the employee is paid, (7) the name of the employee and only the last four digits of his or her social security number or an employee identification number other than a social security number, (8) the name and address of the legal entity that is the employer; and (9) all applicable hourly rates in effect during the pay period and the corresponding number of hours (the employee’s regular hourly rate and any overtime rates). (Cal. Lab. Code § 226(a).)

The itemized wage statement must be provided to the employee semi-monthly and even more frequently in some circumstances. The failure to maintain any records or even providing the employee with inaccurate payroll information by mistake can expose the employer to very harsh penalties of up to $4,000 per employee, as well as penalties under the Labor Code Private Attorney General Act (“PAGA”).

Like personnel files, current and former employees have a right to inspect their payroll records even when the payroll records were furnished to the employee on a regular, semi-monthly basis. Employers must produce payroll records no later than 21 days of the employee’s request and employers who fail to timely produce records face a $750.00 penalty as well as paying the employee’s attorney fees.

Employees who believe they have been fired as a result of unlawful discrimination, retaliation, or harassment will often request their personnel file and payroll records shortly after their termination. If you have been terminated and would like assistance requesting and reviewing your own employment records, contact the Law Office of Brian Mathias.

After an employee’s salary and employer-paid health insurance, there is probably no employment perk more coveted than vacation days. An employee’s decision to apply for employment often rests on the generosity of the employer’s vacation day policy and how frequently the employee will be paid to not work at all. This article provides an overview of California’s laws and regulations for paid time off.

What is Paid Time Off?

Paid time off is commonly referred to as “PTO” or “Vacation Pay”. Legally, PTO is treated as a form of a wage; in other words, it is a benefit that belongs to the employee once it is earned. There is no California requirement that employers provide their employees with any PTO or other form of paid vacation. This is in contrast to California paid sick leave, which must be offered to all California employees. Unlike other forms of leave, paid time off is not a form of “protected leave”, meaning the employer does not have to guarantee the employee reinstatement to their position upon their return from vacation.

Because offering paid time off is purely voluntary, an employer may legally choose to offer a certain amount of paid time off to some employees, and less to others. For instance, an employer may offer better vacation benefits based on seniority to encourage employee retention.

Which Laws Apply to Vacation Pay?

Even though the decision to offer any paid time off is voluntary, employers who choose to offer paid time off to their employees are subject to certain California laws related to the accrual and payout of vacation pay

First, paid time off that has been earned (called “vested and accrued” paid time off) is considered a form of wage or property that belongs to the employee. Just like regular money wages, any vested and accrued paid time off must be paid out upon the employee’s termination of employment. That payment must occur immediately if the termination was involuntary (i.e., a firing) and the payout must occur within 72 hours if the termination was voluntary (i.e., a resignation) (Cal. Lab. Code §§ 201-203). In contrast, unused sick time is not paid out upon the termination of employment.

Second, employers are strictly prohibited from maintaining a “use it or lose it policy” with regard to their employee’s PTO. This means that an employer cannot simply take away an employee’s PTO if it remains unused by a certain deadline. This situation frequently arises with employers who maintain a policy that prohibits the employee from transferring his or her PTO from one year of employment to the next. Any other policy that causes an employee to forfeit his or her vested and accrued paid time off violates California law.

Third, even though employers cannot revoke paid time off that has already been earned by the employee, employers are legally allowed to place a preemptive cap on the total number of vacation hours that may be earned by the employee. For instance, it is lawful for employers to maintain a vacation policy that permits employees to earn a maximum of 80 vacation hours per year. Similarly, as long as employers do not take away paid time off that has already been earned, employers may modify existing vacation policies.

Fourth, some employers offer a sick day/vacation day hybrid, sometimes called “personal days” or “floating holidays”, which may be used for both medical purposes and for the purpose of vacation. Hybrid personal days are treated as paid time off under California law and therefore must be paid out upon the termination of employment. Similarly, these hybrid personal days must offer the same or greater level of protection as regular sick-days.

Lastly, although employees have a clear legal right to eventually get paid the monetary value of their vested and accrued paid time off, employers are in the driver’s seat when it comes to allowing employees to actually use their paid time off. Generally speaking, an employer may decide when an employee may schedule their vacation, how many work days the employee may miss, and otherwise control the terms under which vacation time may be used by employees, even if the employee has available paid time off (Rhea v. General Atomics (2014) 227 Cal.App.4th 1560, 1572-1573).

What are an Employee’s Rights Related to PTO?

Employers who do not pay their former employees in a timely manner the full value of the employee’s remaining vacation pay face a legal claim for unpaid wages and associated penalties. Employees may also recover a “wait-time” penalty for any late or unpaid vacation hours (Labor Code §§ 201-203). The wait-time penalty is equal to a full-day’s wages, up to 30 days, in the case that the employee’s vested and accrued vacation pay goes unpaid by the employer (Id.) Employee’s may also recover their attorney fees in a lawsuit for unpaid vacation hours.

Do you have a question about your own vacation pay? Contact the Law Office of Brian Mathias.

California’s laws regarding medical leaves of absences can be tricky to understand. For starters, have you heard of the FMLA, CFRA, FEHA, PDL, HWHFA, PSL, or PFL? Probably not, and even most California lawyers could not begin to tell you the difference between the legal abbreviations. Assuming you knew what the abbreviations meant, do you know which protected leave applies to large employers versus small employers? Or which type of leave allows a new father to take paternity leave? What about which type of leave provides you with the right to reinstatement?

Sick leave is the least protective form of a medical leave of absence available to California employees, essentially requiring employers to provide just three days of paid sick leaves per year to employees who need to miss work for a medical reason. Unlike other forms of medical leave, sick leave does not require the employee to have disability or that the employee be seriously ill.

There are two forms of sick leave in California: Kin Care and sick leave under the Healthy Workplaces Healthy Families Act (HWHFA). Although Kin Care and the HWHFA are technically separate laws, they are most easily understood as one concept and are discussed together in this article.

What is the minimum amount of sick leave that must be offered?

Only after the enactment of the HWHFA in 2015 did California require employers to offer any sick leave to their employees. Now all private and public employers must offer a minimum of 24 hours worth of paid sick leave annually -the equivalent of just three work days. While many employers offer more than the 24 hour minimum, this is voluntary and is not legally required of the employer. All but very short term or very new employees have the right to at least some sick leave under the HWHFA.

What can employees use sick leave for?

An employee does not actually need to be ill to take sick leave under the HWHFA; only a medical reason is required to use the leave. Routine medical appointments, medical diagnoses, check-ups, and any form of preventative care are all allowable reasons to take accrued sick leave. (Cal. Lab. Code § 246.5(1)).

Both the HWHFA and Kin Care allow employees to use their own accrued sick leave to care for the medical needs of certain family members. The legally recognized family members include children, parents, grandparents, siblings, spouses, and Registered Domestic Partners. (Cal. Lab. Code § 245(4)(c)(1-7)). Not included among the legally protected list of family members are in-laws, girlfriends, boyfriends, fiancés, nephews, nieces, cousins, housemates, partners, or pets. (Id.)

Sick leave may also be used by an employee who is a victim of domestic violence, sexual assault, or stalking.

What must an employee do to take sick leave?

Employees only need to submit a verbal or written request to take accrued sick leave. (Cal. Lab Code § 246.5 (a)). If the reason to take the paid sick leave is foreseeable, the employee is required to provide reasonable advance notification to the employer. (Cal. Lab Code § 246(l)). If the reason for the sick leave is unforeseeable (i.e. a sudden illness) the employee is only required to provide notice for the leave as soon is reasonably possible. (Id). Employers cannot require the employee to find a substitute or replacement employee as a precondition of taking paid sick leave. (Cal. Lab Code § 246.5 (b)).

There no requirement that employees provide their employers with a doctor’s note to verify the reason for the sick leave. (Cal. Lab Code § 246.5 (a)). Employers who require employees to provide a doctor’s note or who pry into the reason for the leave can be sued for interfering with the employee’s right to use sick leave.

What are an employer’s obligations under California’s sick leave laws?

Employers are required to grant an employee’s request to take paid sick leave if the employee has accrued sick leave available and the absence is for a legally covered purpose.

Employers are also required to document the total amount of paid sick leave on the employee’s biweekly pay-stub (sometimes called a “wage statement”). (Cal. Lab. Code § 246(i)). Unlike vacation pay or paid time off, employers do not have to pay the employee the value of the unused sick leave when the employee is fired or quits.

What are an employee’s legal rights under California’s sick leave laws?

In short, employers cannot give their employees a hard time for taking sick leave. Employers are prohibited from denying the employee the ability to use accrued sick leave, and are prohibited from firing, threatening to fire, demote, suspend or any manner discriminating against an employee for using or attempting to use sick leave. If an employee is fired, suspended, or otherwise discriminated against within 30 days of complaining about an unlawful sick leave practice there is a rebuttable presumption that the firing/suspension was retaliatory. (Cal. Lab. Code § 246.5(2)).

Employees may sue their employers for violating California’s sick leave law requirements and may seek monetary damages for lost wages and benefits, emotional or psychological damages (called “general damages”), as well as attorney fees and costs.

Do you have questions about California’s sick leave laws? Contact the Law Office of Brian Mathias.

California’s laws regarding pregnancy and medical leaves of absences can be tricky to understand. For starters, have you heard of the FMLA, CFRA, FEHA, PDL, HWHFA, or PFL? Probably not, and even most California lawyers could not begin to tell you the difference between the legal abbreviations. Assuming you knew what the abbreviations meant, do you know which protected leave applies to large employers versus small employers? Or which type of leave allows a new father to take paternity leave?

Pregnancy Disability Leave is one of several types of “legally protected” maternity and/or pregnancy leaves of absences available to California employees. A leave of absence is “legally protected” if an employer is prohibited from interfering with an employee who exercises her right to take and use the protected leave (i.e. protected from termination).

A pregnancy disability leave lasts up to four months, one month longer than another common type of pregnancy-related leave of absence through the California Family Rights Act (“CFRA”). The employee may use the four months continuously, or in smaller increments of time totaling four months called “intermittent leave”. An employer is not required to continue paying the employee her wage or salary while the employee is on leave. However, the employer must continue the employee’s employer-provided health insurance and must reinstate the employee to her old position and rate-of-pay upon returning from her leave of absence.

Even though a Pregnancy Disability Leave is unpaid by the employer, an employee with a pregnancy disability may qualify simultaneously for a form of public assistance offered by the State of California called Paid Family Leave or “PFL”, a different law entirely from PDL, where the employee is paid a portion of their normal wages for up to ten weeks.

Who Gets to Take Pregnancy Disability Leave?

An employee’s right to take a Pregnancy Disability Leave requires their employer to be a “covered employer” and also requires that the employee is an “eligible female employee” permitted to take the leave. (2 C.C.R. 11035 (g)).

The most unique aspect of California’s Pregnancy Disability Leave law is that most private employers are covered employers required to provide leave if the employee is eligible. An employer is required to provide PDL if they have five or more employees. (2 C.C.R. 11035 (h).) The five employees can be part-time or full-time. If the total number of employees fluctuates during the course of the year prior to the employee’s requested leave, an averaging method is used to calculate the total number of employees. All California governmental entities are covered employers. (2 C.C.R. 11035 (h).)

An employee is an “eligible female employee” entitled to take PDL if they are an employee who is “disabled by pregnancy, childbirth, or a related medical condition”. (Cal. Gov't. Code § 12945). Importantly, there is no length of service requirement for an employee to be eligible for PDL. In contrast, other forms of pregnancy and medical leave required the employee to have been employed for a minimum of one year and to have worked for 1,250 hours in the past twelve months, excluding new employees. Under California’s PDL law, even brand-new employees must be provided with the leave if they are otherwise eligible. Spouses and fathers are not protected under California’s PDL law.

What Types of Medical Conditions Qualify Under PDL?

Being pregnant does not automatically qualify an employee as eligible to take PDL. The employee must be disabled by pregnancy, childbirth, or a related medical condition. Being “disabled” by pregnancy, childbirth, or a related medical condition means that in the opinion of a medical care provider, the employee is unable to perform one or more “essential functions” of their position. (Cal. Gov't. Code § 12945 (a); 2 C.C.R. 11035 (d).) An essential function of the employee’s position is an integral or critical job component, in contrast to a marginal or occasional job requirement.

California provides a non-exhaustive list of example medical conditions that may qualify for PDL; remember that some of these medical conditions arise after the birth of a child when the employee is no longer pregnant: severe morning sickness, prenatal or postnatal care, bed rest, gestational diabetes, pregnancy-induced hypertension, preeclampsia; post-partum depression, actual childbirth or recovery from childbirth, loss or end of pregnancy, and medical complications with lactation or breastfeeding. (2 C.C.R. 11035(d)(f).) Although women experiencing “normal pregnancies” are not eligible for PDL, given that actual child birth is a protected medical condition, all pregnant women who give birth will be eligible at least once during their pregnancy.

To complicate matters, an eligible employee under California’s Pregnancy Disability Leave law may also qualify for other forms of legally protected leave.

What Must an Employee do to Take Pregnancy Disability Leave?

Assuming the employer is a covered employer and that the employee is eligible to take leave, the employee is next required to provide timely verbal- or written-notice sufficient to make the employer aware that the employee needs pregnancy disability leave. (2 C.C.R. 11050). Typically, the notice is provided in the form of a written note from a medical provider (i.e. a doctor’s note). Notice is considered “timely” if provided within 30-days before the leave is to commence. However, if providing less than thirty-days’ notice is not possible, for instance, due to a sudden medical diagnosis, the employee must only provide notice to the employer “as soon as practicable”.

If required by an employer, the employee must provide a medical certification to their employer confirming that they are disabled by pregnancy, stating the accommodations required by the employee, and providing the estimated duration of the leave. (2 C.C.R. 11050). An employer has a very limited ability to pry further into the medical details of an employee’s pregnancy disability or otherwise challenge the medical certification. Id.

What are a Covered Employer’s Obligations Under California’s Pregnancy Disability Leave Law?

Employers covered by California’s PDL have clear but very rigorous obligations with regard to employees who are disabled by pregnancy, employees who request and/or take a Pregnancy Disability Leave, and employees who are returning from a protected Pregnancy Disability Leave.

Employers do not have to continue paying the employee’s salary or wages during the Pregnancy Disability Leave, however, employees may apply accrued paid time-off (“PTO”) towards the absence if they choose to do so. Employers must, however, continue any employer-provided health care coverage for an employee while she is on a Pregnancy Disability Leave.

An employer’s clearest obligation under California’s Pregnancy Disability Leave law is to reinstate the employee to her old position and rate-of-pay upon returning from the leave. In other words, after the employee returns from her four-month leave, the employee must be given her exact job back or a virtually identical position that she held prior to the disability leave in terms of pay, benefits, working conditions, schedule, and status. (2 C.C.R. 11035 (i)(j).) There are very limited exceptions and defenses available to employers who do not reinstate their employees after returning from leave.

Lastly, employers are required to provide a specific form of written notice to their employees regarding the employee’s rights to take Pregnancy Disability Leave. This obligation is triggered when the employer learns that the employee is pregnant or when the employer learns that the employee needs a Pregnancy Disability Leave. (2 C.C.R. 11051).

What Are an Employee’s Legal Rights Under California’s PDL law?

Employers are prohibited from interfering with, or retaliating against, an employee who exercises their rights to take Pregnancy Disability Leave or who attempts to exercise those rights. Unlawful “interference” includes refusing to reinstate an employee at the end of a protected leave or refusing to grant a Pregnancy Disability Leave altogether.

Employees may sue their employers for violating California’s Pregnancy Disability Leave law and may seek monetary damages for lost wages and benefits, emotional or psychological damages (called “general damages”), as well as attorney fees and costs.

Do you have questions about California’s Pregnancy Disability Leave law? Contact the Law Office of Brian Mathias.

The term “independent contractor” is commonly understood as a person, who is not an employee, who provides labor or services to another person or company. While an employee is understood to be under the control, guidance, and authority of an employer, by contrast an independent contractor is generally understood to be an actually independent person in business for themselves.

In California, the rights of an independent contractor depend on whether they have been properly classified under the law as an independent contractor, or in the alternative, if they have been misclassified and are in-fact an employee. There are potentially very severe repercussions for misclassifying an employee, even if the misclassification was unintentional. Misclassifying an employee as an independent contractor can trigger stiff overtime wage obligations, taxation, and withholding liabilities, and protections against unlawful termination under the California Fair Employment and Housing Act (called the “FEHA”). For instance, a properly classified independent contractor is not entitled to overtime, even if they work longer than 8 hours per day or 40 hours per week. Similarly, since a properly classified independent contractor is not an employee, they by definition cannot have their employment terminated—let alone, unlawfully terminated—in violation of the independent contractor’s civil rights under the FEHA. Every year it generally gets tougher for an employer to properly claim their workers are independent contractors; California wants workers to be classified as employees and not as independent contractors.

It is therefore critical to have a basic understanding of how California determines whether a person providing labor to another is properly classified as an independent contractor, or is in-fact an employee.

How is an Independent Contractor Defined in California?

To complicate matters, California does not have a traditional definition of “independent contractor”. First, California has a general presumption that “any person rendering service for another, other than as an independent contractor, is presumed to be an employee.” (Cal. Lab. Code § 3357). It is assumed that a person providing services to another is an employee; it’s then up to the employer to prove that the worker is an independent contractor.

Remembering the general presumption, California typically uses two multi-factor balancing tests called the “ABC Test” and the “Borrello factors” to determine if a person has been properly classified as an independent contractor. The new “ABC Test” is thought to be more favorable to employees than the older “Borrello factors”, and the underlying employment issues dictate which test is used.

What are some of the factors courts look at?

This article does not discuss or list all the underlying factors in both tests. However, here are some of the more important factors courts look at and how they are applied.

The level of employee control. Both independent contractor tests look at whether the person hiring the contractor (called the “principal”) has the right to control the manner and means by which the worker accomplishes the work. In other words, the worker must be free from the control and direction of the person hiring them and mostly make their own decisions about how to get the job done. The more of a principal’s rules, policies, and procedures the independent contractor must follow, the more likely it is they are actually an employee. Independent contractors who must report to a specific place of work each day, who must work a schedule set by the principal, or who must wear a company uniform are probably not true independent contractors.

Whether the worker performs labor outside the usual course of the hiring entity’s business. Both tests look closely at what type of labor and function the worker is performing for the principal and how integral that employee’s work is to the principal’s business. For example, at a restaurant the jobs of cooking and preparing food, waiting tables, and washing dishes are integral to its core purpose of making and selling food. It would be difficult to argue that workers performing those functions are proper independent contractors. On the contrary, the function of repairing computers is not integral to the operation of a restaurant, even if computers are incidentally used in the operation of the business. Therefore, a worker hired periodically to repair the restaurant’s computers may very well be an independent contractor.

Whether the worker is engaged in an independently established trade or occupation of the same nature as the work performed. Both tests look to whether the worker is actually an independent business person, or on the contrary, whether they work exclusively for the principal as an employee would. In other words, does the independent contractor hold him or herself out to the public at-large as being able to perform the same type of work? For example, a tech consultant with their own LLC, website, business cards, and a long list of current clients would likely be a true independent contractor. On the contrary, an in-house tech support worker who only performs services for a single company and does not hold themselves out as a separate business is likely to be classified as an employee.

Independent Contractor Myths

Employers will frequently assert that if an employee uses their own tools they are automatically independent contractors. This is not the case. Whether or not a worker supplies their own “instrumentalities and tools” is just one factor in the multi-factor independent contractor test. Furthermore, to the extent that a worker provides their own tools, courts will determine how much investment the employee has in those tools (i.e. the cost of those tools). A restaurant chef that brings his own knife to work each day would not automatically be classified as an independent contractor, especially, if that same chef worked for one restaurant on a full-time basis and cooked a menu to the restaurant’s owners’ specifications.

Employers often over-rely on a contract with the worker, sometimes called an Independent Contractor Agreement. In these agreements, the worker and the principal agree in-writing, sometimes from the beginning of their relationship, that the worker will be designated as an independent contractor. These types of agreements are often void as contrary to California public policy, especially if minimum wage and overtime allegations are at issue. Even if the contract is not automatically void, the parties’ belief that they are in-fact creating an employer-employee relationship or principal-independent contractor relationship is just one factor in a multi-factor balancing test to determine the worker’s classification.

Repercussions for Misclassifying Independent Contractors

In California, employees of all types have a multitude of rights and protections, including but not limited to, the right to overtime pay, rest and meal breaks, reimbursement for expenses, and protection against unlawful discrimination in employment, including termination in violation of the California Fair Employment and Housing Act. While a properly classified independent contractor is typically limited to the rights under their contract, a misclassified independent contractor has the same rights and remedies as any employee. A misclassified independent contractor may therefore sue their former employer for wrongful termination and many other common wage-and-hour violations, albeit after establishing their misclassification. Employer’s often face tax consequences from misclassification of independent contractors, including claims from California’s Employment Development Department (called “the EDD”) if the misclassified independent contractor seeks unemployment benefits after their termination.

Do you believe you are an independent contractor who has been misclassified? Call the Law Office of Brian Mathias.

In short, an interactive process is the legally required discussion between employer and employee that comes into play when an employee actually has – or is perceived by the employer to have – a physical or mental health condition that makes working difficult (legally called a “disability”).

Legally an interactive process is described as a timely, good-faith, and flexible dialogue between an employer and an employee to identify and assess actual and/or potential “reasonable accommodations” for the disabled employee. A reasonable accommodation is a modification to workplace practices, procedures, or equipment that allows the employee to perform the essential functions of the employee’s job. An employer is legally obligated to provide a reasonable accommodation unless doing so would constitute an “undue burden”, which can be a very difficult standard to meet. If an employee cannot perform the essential functions of their job, even with reasonable accommodations, the employee may be terminated because of their disability. However, if the employee can perform the essential functions of their job, with or without reasonable accommodation, the employee must remain employed and his or her termination would violate California’s prohibition of against disability discrimination.

To better understand the concept of an interactive process, know that California’s public policy is to keep injured workers in the workforce unless it would be very difficult for their employer to accommodate them. To effectuate this public policy, California requires employers and employees to discuss what potential adjustments or modifications to the job may keep the injured employee working, despite the disability. The requirement of a good-faith interactive process helps assure that employers make the right decision when terminating any disabled employees and that any solutions short of termination may have been duly considered by the employer.

An employer has a very rigorous obligation to have a “timely and good-faith” interactive process with their disabled employees. Any employer with five or more employees can be sued under the California Fair Employment and Housing Act (called “the FEHA” and pronounced “fee-hah”) for failing to engage in an interactive process with their employees.

Employers – both big and small, government and private sector – frequently botch the interactive process. Here are several common ways that employers get the interactive process wrong:

Not Informing the Employee of the Purpose of the Interactive Process Meeting. It is common for employers to hold ambush-style interactive process meetings with their disabled employees. In these instances, the employee is not told what the meeting is about in advance; merely that the employee is required to show up for a meeting, usually with Human Resources. The employee is then asked, on-the-spot, to provide any accommodations or else be terminated.

Conducting an interactive process in this manner deprives the employee of any meaningful context for the interactive process, including that they may be terminated because of their disability if no accommodations are ultimately identified. Ambush-style interactive process meetings also deprive the employee of any ability to prepare in advance for the meeting by speaking with their own medical providers, reviewing medical documentation, and reviewing what their own actual or perceived work limitations are.

Delaying or Rushing the Interactive Process. A lawful interactive process must be “timely”. It follows that the process cannot be unreasonably delayed, nor rushed once it is initiated. When the employee requests an accommodation, or when the employer otherwise believes the employee is disabled, the interactive process must be initiated. Employers cannot lawfully set up disabled employees for failure by delaying an interactive process with the employee, and thereby delaying any requested accommodations that allow the job to be performed successfully.

Similarly, employers frequently try to satisfy their rigorous obligations under the FEHA by attempting to complete the interactive process with a single short meeting or discussion with the employee. The interactive process is not intended to be a “one-and-done” meeting, but a good-faith, problem-solving process that takes as long is required to identify effective accommodations. After reasonable accommodations are identified, they must be tried out to assess their overall effectiveness, and if ineffective, the accommodations need to be adjusted via one or more additional interactive process discussions..

Not Understanding the Employee’s Precise Medical Limitations.As part of the interactive process the employer is required to identify the employee’s precise medical limitations and identify how those medical limitations actually impact the employee’s underlying job.

Too frequently, employers will rush the process without understanding what the employee’s actual medical conditions are, such as terms used in a doctor’s notes or workers’ compensation reports (i.e. “PQME Reports”). Failing to identify the precise limitations often cause employers to over-exaggerate the gravity and seriousness of sometimes very minor medical limitations that do not at all affect employee job performance. Firing an employee based upon incorrect and exaggerated beliefs constitutes disability discrimination, even if the employer’s express motive was to protect the employee from future injury.

Not Understanding the Actual Job Functions.Disabled employees are often terminated when their actual health limitations do not actually impact their ability to work. For example, it is likely unimportant that an administrative assistant or office worker - has a 30-pound lifting limitation, a typically sedentary position that does not require any heavy lifting.

Employers will frequently fail to identify what the underlying job physically actually requires of their disabled employee during the interactive process, causing the employer to terminate based off bad information. This situation typically arises when executive level employees, such as Human Resource officers or workers’ compensation insurance adjusters, decide to terminate without knowing what the employee’s job actually entails (called “the essential functions”), typically after relying upon a generic, outdated, or inaccurate job description. The same employees are terminated without the employer actually speaking with the employee or the employee’s immediate supervisor about what is physically required of the employee.

Not Offering Any Employer-Provided Accommodations. The interactive process is intended to be a two-way street. Both the employer and the employee must participate in the process in good-faith. Employers too frequently will place the burden of identifying potential accommodations entirely on the employee. Merely asking the employee if any reasonable accommodations exist will not likely satisfy the employers rigorous obligations under the FEHA, especially in the context of a rushed interactive process. Further, if the employee cannot continue to perform their current job with or without accommodations, employers are required to provide the employee with any open, vacant, and funded positions (called a “reassignment accommodation”). The employer must then consider whether the disabled employee can perform the essential functions of those open, vacant and funded positions with or without accommodations.

Corporations and LLCs are highly attractive business entities for employers because of their limited liability protection. Generally speaking, this means that the actual shareholders, officers, and directors who operate and own the underlying business are not personally on the hook for the company’s debts and obligations. Rather, the underlying company -as a separate and distinct entity- is responsible for its own debts and obligations.

California has a very large exception to corporate limited liability when it comes to unpaid wages, late paid wages, and other common wage-and-hour violations through California Labor Code Section 558.1. This short but very powerful law was enacted to combat wage theft by corporate employers who try to terminate their business to evade their obligation to pay wages.

Section 558.1 states that any employer (such as a corporate employer) or other person acting on behalf of an employer may be held liable as the employer for a violation of six of the most common unlawful wage violations. The section goes on to clarify that “other person” means a natural person who is an owner, director, officer, or managing agent of the employer. Thus, individual owners, directors, and agents are on the hook for labor code violations by the corporate-employer.

Some of the most common California Labor Code violations are included within the purview of this new law, exposing actual business owners to liability for a company’s unlawful conduct:

1) California Labor Code Section 203 requires employees to be immediately paid their complete and full wages upon an involuntary termination or within 72 hours of their resignation. If payment is not received within those times the employer and/or the person acting on behalf of the employer, owes a penalty called the “waiting time penalty” equal to a full day’s wages, for up to 30-days.

2) California Labor Code Section 226 requires that employers furnish a semi-monthly pay stub that accurately lists the number of hours worked, the employee’s pay rate, any deductions, and the name and address of the employer.

To illustrate the power of this law, imagine the following hypothetical of Jared vs. Acme Mechanics Incorporated, a California corporation. Jared works as an auto mechanic for Acme Mechanics, Inc. a small California corporation solely owned and operated by Mike, Acme’s CEO. Jared works for Acme, Inc. for a number of months, but Acme, Inc repeatedly delays payment and then stops paying Jared altogether. Acme Inc. then goes out of business without paying Jared any of his last month’s wages. Jared may file a lawsuit against both Acme, Inc. and also against Mike as Acme’s owner, director and managing agent for his unpaid wages. Mike, the sole owner and CEO may be personally liable under 558.1, even though Acme Mechanics Inc is no longer in business and lacks assets, greatly increasing Jared’s chances of actually recovering his unpaid wages.

Do you have a claim for late or unpaid wages? Contact Law Office of Brian Mathias.

Are you or will you be a new parent? Do you work for an employer with 20-49 employees? Start the countdown. In less than 90 days California’s brand new, and much more expansive protected parental leave of absence law will come into effect on January 1, 2018. No surprise, this law protects and expands the rights of employees, not employers; this is California, after all.

What does the new law do and how is it different than the old law?

The new law makes an addition to the California Family Rights Act (“CFRA” and pronounced “cee frah”) which allows certain employees to take a legally protected, unpaid 12-week leave of absence from work (called “protected leave”) to bond with a new baby or adopted child. The 12-weeks of leave may be taken as one uninterrupted block of time, or may be taken in smaller bites of time called “intermittent leave”. The law applies to both moms and dads.

Formerly, CFRA applied to employees who work for employers who have 50 or more employees (this mirrors the federal government's version of a similar law called the Family Medical Leave Act (“FMLA”). Read more about the old law here. Now, CFRA has expanded by requiring employers with just 20-49 employees to provide the same protected leave of absence to new parents. The same law will now apply to smaller employers and cover three-million additional workers in California.

What does the employee have to do?

There are essentially three requirements for employees to receive a protected parental leave of absence under CFRA.

First, the employee must have worked for the same employer for at least one year, and worked at least 1,250 hours in the past twelve months. Brand new employees are not covered under the new law, however, employees at or near the one-year mark may sue their employer for anticipatorily interfering with their right to protected leave in the right circumstances.

Second, the protected leave of absence must be for the purpose of bonding within a new child within one year of the child’s birth, adoption, or foster care placement. The new expanded leave law does not protect employees who need time off work to care for their own illness or the illness of a family member; only employers of 50 or more employees must provide that protection to employees.

Third, employees must request the parental leave from their employers. Employees should never rely on the employer to offer the leave.

What does the employer have to do?

First and foremost, employers are required to reinstate their employees to the same job or a comparable job when they return from the parental leave. Remember, the power behind the new law, and all of CFRA/ FMLA, is the right to return the same job when the leave of absence is over.

Employers cannot terminate the employee’s medical insurance during the 12 week protected leave of absence. However, if an employee refuses to return to work after the leave is over the employer can recover the amount of the insurance premiums from the employee.

Importantly, the leave of absence is unpaid, as are all other CFRA-FMLA absences. However, employees must be allowed to apply their accrued PTO or sick time to the leave of absence.

What should an employee do and what can the and employee do or sue for?

In this writer’s experience, large employers already frequently underestimate their rigorous obligations under the CFRA and FMLA. Both laws are complicated and are very demanding on employers. Moreover, the expanded new law takes effect so quickly and covers so many additional smaller employers that it will catch many employers flat-footed. This will result in a tremendous amount of new litigation in California for violation of the parental leave law.

Notably, employers do not need to intentionally deprive an employee of their right to protected leave to be liable under the law. A simple bureaucratic or administrative mistake or ignorance of the law can expose an employer to very large legal claims.

Employers who fail to reinstate employees after the parental leave, or who interfere with the employee’s right to leave, or who take any adverse or retaliatory action against employees for exercising this new right can get sued by the employee. CFRA retaliation or interference claims include damages for lost income, punitive damages, as well as the plaintiff-employee’s attorney fees.

Employees who sense that their employer is interfering with their right to protected parental leave, or who have been refused reinstatement, should contact a plaintiff’s employment lawyer as soon as possible.

Is your employer of 20 or more employees allowing you to take a twelve-week leave of absence to care for a new child? If “no”, contact the Law Office of Brian Mathias.

The practice of giving employee gratuities or “tipping” allegedly originated from the 17th century English practice called “To Improved Promptitude” or “TIP”. As the story goes, bar patrons would slip waiters a coin to speed up delivery of their drinks. The practice has now changed so that the tip is given at the end of the service and not the beginning. And now, California law has quite a bit to say on the issue of tipping. Here are five things to know about employee gratuities in California.

The Gratuity is the Exclusive Property of the Employee

California law clearly states that the tip belongs to the employee, not the employer,“Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid…” Labor Code Section 351.

This raises two common legal issues. First, it is unlawful (both civilly and criminally) for the employer to take any part of the tip that was left for the employee. Employers cannot require their employees to share their tips with the employer. One-hundred percent of any tip must go to the employee.

Next, it is legal under specific circumstances for employers to require employees to share their tips with other employees, called “tip pooling”. However, managers, certain supervisors, and owners cannot share in the pooled tips, even if those persons participated in the table service of the customer.

2. Minimum Wage Must Still Be Paid

People are often surprised to learn that California employees who receive regular tips, such as waiters, must still be paid at least minimum wage before tips. This requirement applies no matter how much the employee is tipped on a given day. For example, a waitress could receive $100.00 in tips over the course of an hour and the employer must also pay at least minimum wage of $10.50 per hour. It is illegal to pay employees exclusively in tips.

California’s employee-friendly tip law is in the minority. Most states and the federal government allow employers to credit or offset the applicable minimum wage if the employee receives tips at work. Furthermore, roughly 40% of the states only require a base wage of just $2.13 per hour for tipped employees; the rest of the wage may come from tips.

3. Employers Cannot Deduct Credit Card Fees

Issues with employee tips increasingly arise as more and more people pay by credit card. Employers are expressly prohibited from deducting any credit card transaction fees from tips. For example, if a customer pays a gratuity of $5.00 and a $20.00 bar tab by credit card, and the employer pays a $1.00 transaction fee to the credit card processor, the employer is not allowed to require the employee to pay the twenty-cent pro rata share of the credit card fees. All of the credit card fees must be paid by the employer.

This law is a good example of how California wage laws can be very favorable to employees and burdensome for employers.

In the hustle and bustle of a restaurant, it can be easy for employers to overlook their rigorous obligations to allow for the opportunity for breaks under California law.

5. Employers Can Be Sued For Violations

Employers who even unknowingly violate California’s gratuity laws can face a variety of legal claims. This includes minimum wage violations, tip theft “conversion”, and violation of California’s tip laws. Employers with 20 or more employees who violate these laws may be sued as a part of a class action lawsuit, or under California’s Private Attorney General Act (called “PAGA” and pronounced “pah gah” by lawyers).

Are you a tipped employee in California? Do you have questions or concerns about how your tips are being handled by your employer? Contact the Law Office of Brian Mathias.

California’s laws surrounding pregnancy leave and pregnancy discrimination are tricky for employees, human resources, and lawyers alike. For starters, have you heard of the FMLA, CFRA, FEHA, PDL, or PFL? Probably not, and even most California lawyers could not begin to tell you the difference between the legal abbreviations.

Pregnancy employment laws are complicated with many nuances, lots of pages of detail, overlap and conflict with other laws, and regular legislative updates. However they may be easily understood by viewing them in the big picture.

First, California’s public policy is to keep pregnant women and new parents in the workforce. California has written a variety of laws and regulations to implement this public policy. The laws are written for the benefit of employees, they are many times burdensome for employers, and when the laws are ambiguous they are generally applied in favor of the employee.

Second, California law has three different types of protections for pregnant women: 1) a general prohibitation against pregnancy discrimination; 2) an allowance for job protection during a leave of absence for pregnancy, childbirth, or baby bonding (called “protected leave”); and 3) wage and income replacement for missed work.

1. Anti-Discrimination/ Wrongful Terminations:

California’s Fair Employment and Housing Act (abbreviated “FEHA” and pronounced “fee ha”) prohibits workplace discrimination or “wrongful termination” on the basis of pregnancy status. This means that an employer of five or more employees cannot fire or demote a pregnant person because of their pregnancy status. In other words, employers cannot fire an employee because they are pregnant. This includes, in many instances, terminating a pregnant employee because the employer believes the employee would be harming their unborn child by continuing to work.

Similarly, it is a myth that a pregnant employee cannot be subjected to discipline, terminated, written up for poor performance, or otherwise fired while pregnant. Again, the law prohibits the termination of a pregnant employee when the termination is “substantially motivated” because of the pregnancy status. A termination or other adverse employment action not related to the pregnancy may be lawful.

California’s public policy is implemented by allowing for a period of protected time off work, called “protected leave” or a "leave of absence" so that pregnant women may address medical complications during their pregnancy and so new parents may bond with their newborn children. These laws are addressed by the California Family Rights Act (abbreviated “CFRA” and pronounced “cee frah”) and its federal counterpart (the Family & Medical Leave Act or “FMLA). The power behind CFRA and FMLA is that they require employers to hold open the employee’s job for at least 12 weeks and then “reinstate” the employee to their old position when they return to work.

Protected leave only applies to large employers who have fifty or more employees. Similarly, the employee must have worked for their employer for one year or more in order to qualify for leave. New employees are generally not given protected leave.

“Baby bonding” is a part of the CFRA and it serves the public policy of allowing new parents (both moms and dads) to take time off work to care for their newborn children. A CFRA/FMLA eligible employee may take up to 12 weeks of unpaid leave for baby bonding. Similarly, the 12 weeks of leave may be taken as one uninterrupted block of time, or may take it in smaller bites of time, called “intermittent leave”.

California law prohibits employers from retaliating against employees who ask for or take protected leave, and also prohibit employers from interfering with an employee while they take protected leave.

A pregnant mother may qualify for an additional four months of protected leave called“Pregnancy Disability Leave” (or “PDL”) in the event they suffer medical complications during their pregnancy, such as the need for bed rest, severe morning sickness, prenatal care, and other complications arising from pregnancy. Not all pregnant women will qualify for this leave, only those that suffer a medical complication or disability during pregnancy.

This leave is in addition to the leave allowed by CFRA or the FMLA; therefore, an employee that qualifies for PDL and CFRA/FMLA may take seven months of protected leave. Unlike the CFRA or FMLA, employers of five or more employees must allow for PDL and there is no minimum one-year work requirement for the employee.

3. Wage and Income Replacement

Lastly, while California's laws prohibiting discrimination against pregnant women and allowing for protected leave are generally strong, California laws that provide for wage replacement for new moms and dads are generally weak.

While CFRA prohibits employers from terminating health insurance of an employee on protected leave, there is no requirement that the employer keep paying them their regular wages and salary. In other words, a new parent that takes 12 weeks of baby bonding leave will not be paid any actual money.

California’s Employment Development Department or “EDD” (in this writer’s opinion, the most unruly, slow, and horrible bureaucracy in California) does provide some wage replacement to employees who take time off work to bond with a new child, called “Paid Family Leave” or “PFL”.

The problem is that PFL does not pay very much. It only pays four weeks pre-pregnancy if you are considered “disabled” by your pregnancy, and only six or eight weeks after delivery to recover from childbirth or bond with a newchild. Moreover, the employee is only paid about 50% of their normal wages, and in any event no more than $1,173.00 per week.

Are you a Santa Cruz or Monterey County employee facing challenges at work because of your pregnancy? Contact the Law Office of Brian Mathias

Usually employees will only contact an employment law attorney after an employment crisis has occurred, such as getting fired. However, there are several things that employees can do to protect themselves before an employment crisis. Here are five tips for employees who are still employed:

Don’t Work Without Getting Paid.

It seems obvious, but many good natured and trusting employees continue to work for employers who are late in paying regular paychecks, who issue bounced checks, or who outright refuse to pay their employees. Employers who issue bad checks or who fail to pay wages can be sued for penalties that greatly exceed the amount of the actual wages.

The problem for employees is that an employer’s failure to pay timely wages is often indicative of major financial problems, like a looming bankruptcy. Employees who continue to work for employers without pay risk collecting nothing from their employer even if they successfully sue their employer for owed wages and penalties.

2. Stay in Contact With Former Employees

Co-workers are almost always used as witnesses in wrongful termination lawsuits. Unfortunately, current employees are usually unfavorable or “hostile” witnesses for plaintiff employees. This is because current employee witnesses still collect a paycheck from the business that’s getting sued, are scared of retaliation, and do not want to cause problems for themselves at work.

However, former employees are typically very good witnesses for plaintiff employees. This is because former employees no longer have a sense of loyalty to the employer and can speak with more candor with greater credibility.

For this reason, it is a good practice to stay in contact with respected former employees.

3. Respond to Serious Poor Performance Allegations In Writing

Employees who are wrongfully or unfairly accused of serious performance problems should respond in writing in a timely, calm, succinct, and professional manner, and preferably by email. The writing should clearly explain why the employee is not at fault. To illustrate, take the following case of Mike, a corndog cook at Hot Dog On A Stick in Capitola.

Mike is responsible for draining and re-filling the restaurant’s deep fryer when directed by his immediate supervisor, Jared. Five minutes before closing, Jared tells Mike to drain and refill the deep fryer. Unfortunately, the store closes before Mike can complete the draining and refilling process. The next day, the store is late in serving corn dogs because Mike needed to finish refilling the deep fryer. Jared is furious and issues Mike a written warning for insubordination. In the blank “Employee Response” section of the written warning, Mike writes:

“Five minutes before closing yesterday, Jared told me to change the fryer oil. This is a 45 minute process. Before I could finish, my shift was over and the store closed. I completed the process when my shift started the next day. I was not insubordinate.”

Mike’s timely, calm, succinct, and professional note can now serve as favorable evidence one, two, or even five years later in the event of a wrongful termination lawsuit. Just as employers document employee performance problems, employees must create a paper trail of their own.

4. Request Your Personnel File and Keep Copies of Employment Records

Current and former employees are entitled by law to inspect and copy their personnel file which should contain important employment records. When appropriate, employees should ask to review their personnel file if they suspect false or defamatory statements have been made about their job performance.

Similarly, employees should keep copies of their paystubs and important personnel records, such as awards, letters of recommendation, notes of customer appreciation and any other document that shows they are performing their job well. Employees should not rely on employers to include positive records in their personnel file.

5. Contact an Employment Law Attorney Before A Crisis Occurs

Employment law is one of the most complex and aggressively litigated areas of California law. It is almost always in the employee’s interest to contact an employment law attorney before an employment crisis if the employee is experiencing harassment, discrimination, retaliation, or is not getting paid their wages or is not provided with rest and meal breaks.

Are you a Monterey, Salinas, Watsonville or Santa Cruz employee facing an employment scris? Ready to stand up for your rights? Contact the Law Office of Brian Mathias.

Employment law is full of surprises. Here are five employment law surprises, myths, and misconceptions:

Two Weeks’ Notice Is Not Legally Required

Giving two weeks' notice to your employer before you quit is not legally required. On the contrary, employment in California is presumed to be “at-will”. Employment is “at will” if it has no specified term. It may be terminated “at the will” of either party, meaning any time. Inversely employers can terminate employees whenever they like, so long it is not for an illegal reason.

The major exception is if the employee is employed for a contracted length of time, for example for one year. In this case, the employment could not be terminated “at-will” by either party. However, most employees do not have written employment contracts.

2. It’s An “At-Will” State. I can fire you for whatever reason I want.

Employment in California is presumed to be at-will, true. But with a big exception. Employees may not be terminated for an illegal reason. There are dozens of California and federal employment laws that prohibit termination of employment, even in an at-will context.

For example, employment may not be terminated because of a "protected characteristic". This includes terminations based on age (if over 40), ancestry, color, disability or “health” discrimination, gender, gender identity, military and veteran status, marital status, national origin, race, religion, and sexual orientation. Other policies prohibit retaliation against whistle blowers (employees who have reported illegal acts).

At-will is not carte blanche.

3. If I pay you a salary you don’t get overtime.

Employers, and even human resource managers, very frequently believe that if an employee is paid on a salaried basis, rather than an hourly basis, the employee is not entitled to overtime pay. This is not the case at all.

There are two classifications of California employees, “exempt” employees and “non-exempt” employees. Non-exempt employees are entitled to 1.5 times their hourly rate for any hours worked longer than 8 per day or 40 per week, meal breaks, rest breaks, and other protections. Exempt employees are not.

Employers and employees cannot simply agree on a classification. Rather, it is determined by looking at a complicated, multi-factor test. Each factor of the test needs to be satisfied before an employer can claim an employee is not entitled to overtime. Only one of the factors is whether the employee is paid on a salaried basis rather than an hourly basis. The most important and overlooked factor is whether or not the employee applies discretion and independent judgment on matters of significance. In simple terms, is the employee a grunt-level laborer or high level company decision maker? Read more here.

4. I was terminated without cause!

Employees often believe that if they are terminated “without cause” that they can sue their former employer. This is not the case.

Employers are not legally required to have a cause to terminate the vast majority of employees. Employers may legally terminate employees without cause, for arbitrary and unfair cause, or even out of a mistaken cause that the employee performed poorly. Without more, the failure to terminate “for cause” does not give the employee the ability to sue their employer.

What employers cannot do is terminate employees for an unlawful reason. For example, employers cannot terminate an employee because of the employee’s health condition, injury, or illness if the employee can still perform the essential functions of their job; called “disability discrimination”. Employers will often claim that an employee was fired “for cause” to disguise an otherwise illegal termination, called a “pretextual termination.” Read more about wrongful terminations here.

5. I have a hostile work environment!

The term “hostile work environment” is not a myth. It’s a common type of employment lawsuit. However, the legal definition of a “hostile work environment” is much narrower than what most employees expect.

A hostile work environment is a form of harassment in employment. However, harassment is only illegal in California if the plaintiff-employee is subjected to it because of a legally protected characteristic. Legally protected characteristics include age (if over 40), ancestry, color, disability or “health” status, gender (including pregnancy and “sexual harassment”), gender identity, military and veteran status, marital status, national origin, race, religion, and sexual orientation.

Employees do not have an illegal “hostile work environment” simply because they are overworked, are set up to fail by a rival supervisor, or because of an aggressive, mean, and vindictive working environment. The harassment must be directed at the employee because of a protected characteristic. Read about a hypothetical harassment case here.

Are you a Santa Cruz, Capitola, Scotts Valley, or Watsonville employee who wants to clarify an employment law myth? Visit BrianMathiasLaw.com

Lunch breaks (legally called “meal periods”) must be provided after five working hours and must be at least one half-hour in length. Importantly, lunch breaks must be “duty-free”. A duty-free lunch break means that the employee is not required to perform any work. Employers who require employees to eat at their desk or do not allow the employee to leave the business premises do not provide “duty-free” breaks and are in violation of California law.

Employers who fail to provide a duty-free meal period are required to pay a penalty to the employee called a “meal period premium” of one additional hour of pay for every missed meal break. (For example, a non-exempt employee paid $10.00 per hour would be owed a $10.00 meal premium for each missed break).

Employers who systematically do not provide employee lunch breaks, especially those with many employees, face potentially enormous exposure in premiums, interest, penalties, and attorney fees.

There are only a few exceptions to California’s otherwise stringent lunch break requirement. One such exception is the “on-duty meal period”. Under the on-duty meal break exception, an employer may require an employee to work during their lunch break, provided that the employee is paid their normal wage during their lunch. Since it can be burdensome for employers to schedule and provide regularly occurring meal breaks, employers frequently attempt to use this exception.

However, on-duty meal breaks come with a huge catch. The exception is so narrow that only a tiny fraction of all employers could ever successfully use it to defend against a meal break lawsuit.

To apply the on-duty meal break exception, the employer must prove that the nature of the work makes it “virtually impossible” for the employee to take a duty-free half hour meal break. In other words, there is literally nothing the employer could reasonably do to create the circumstances that would allow a proper, duty-free lunch break.

Legally enforceable and valid on-duty meal periods also require the employer and the employee to enter into a revocable, written agreement stating that both parties agree to the on-duty meal period. This requirement is often overlooked by employers.

To illustrate these concepts, Mike works at Hot Dog on a Stick in Watsonville and is paid $15.00 per hour. Because Mike is the only manager during the night shift, Jared the owner requires him to be on-duty at all times to answer employee questions and deal with difficult customers. Jared verbally tells Mike that he must take “on-duty meal breaks” and forbids Mike from leaving the restaurant for longer than 10 minutes. Mike works for many years under these circumstances, and then is abruptly fired after he is wrongfully accused of stealing a corn dog.

Mike has a great case for unpaid meal breaks because the narrow on-duty meal break exception does not apply.

Even though Mike is the only manager at Hot Dog on a Stick, it is not “virtually impossible” for him to take a thirty minute, duty-free meal break. Other employees could have simply been trained to handle employee questions and customer complaints. Jared could have re-scheduled other employees to assure coverage during Mike’s half hour lunch break. Additionally, Jared failed to ever enter into a written On-Duty Meal Period Agreement with Mike, as is required by the narrow exception.

One of the very few exceptions to paying overtime in California is called an Alternative Workweek Schedule.

An Alternative Workweek Schedule is a written agreement between the employer and their employees for the employee to work longer than eight hours per day without paying overtime. The most common type of Alternative Workweek Schedule is called a “Four-Ten” meaning the employee works four, ten-hour days per week instead of five, eight-hour days per week. Under a lawfully enacted Four-Ten Alternative Workweek Schedule the employee is not entitled to any overtime even though that employee worked ten hours in a single day, which under normal circumstances would entitle her to two hours of overtime pay.

Alternative Workweek Schedules are often desired by employees because they create regular three-day weekends. Similarly, employers desire alternative workweek schedules because they can work their employees for longer stretches on any given work day without paying time-and-a half.

But Alternative Workweek Schedules come with a very big catch. In order to be valid and enforceable, the employer must strictly follow many highly technical procedure requirements to enact a lawful Alternative Workweek Schedule. These requirements can be so technical and complicated that many employers do not implement them correctly and rendering them invalid. Alternative Workweek Schedules cannot be established with a simple handshake. In fact, the requirements are so technical that an attorney is often required to establish a valid and enforceable Alternative Workweek Schedule.

As an example of some of the requirements to enact a valid and enforceable Alternative Workweek Schedule, the employer must schedule an alternative workweek election among the affected employees, draft ballots, issue pre-election disclosures, hold an election at the worksite during regular work hours, and then report the results of that election to the California Department of Industrial Relations within 30 days. And these are just some of the requirements.

There are potentially severe consequences for employers who do not follow all the legal requirements for a valid and enforceable Alternative Workweek Schedule. This includes paying overtime pay to every employee who worked under the invalid Alternative Workweek Schedule, as well as interest and wait time penalties on those unpaid wages going back several years.

Are you working a four-ten schedule or other Alternative Workweek Schedule? Contact the Law Office of Brian Mathias for a free consultation.

If you make less than $47,476.00, you may be entitled to a substantial amount of unpaid overtime by your employer due to a change in California and federal employment law.

For legal background, there are two employee classifications in California: exemptemployees and non-exemptemployees.

Exempt employees are not entitled to overtime for any hours worked in excess of eight hours per day or 40 hours per week, meal breaks every five hours, rest breaks every four hours, and other protections. A non-exempt employee could work 100 hours per week and not be entitled to anything but their regular salary (ie. $60,000 per year). A properly classified non-exempt employee must be paid a minimum salary of $47,476 beginning December 1, 2016, and must spend 51% of their time performing non-exempt job duties, such as supervising of other employees or perform high-level office work, like accounting or human resources.

Non-exempt employees are entitledto overtime, breaks, and many other protections. For example, a non-exempt employee would be entitled to 20 hours at 1.5 times their regularly hourly rate if they worked 60 hours per week. Statistically, most employees are non-exempt, even employees that spend some time managing other workers or who perform non-manual office work.

Employers regularly misclassify employees as “exempt” to avoid rigorous obligations to pay overtime and provide breaks. However, there is a common misperception among workers and employers that an employer simply needs to pay an employee a flat salary, rather than an hourly wage, in order to classify an employee as “exempt” from overtime. Payment of a salary rather than an hourly wage is just oneof many factors in determining whether an employee is properly classified.

Moreover, beginning December 1, 2016, all exempt employees must be paid a minimum salary of $47,476in order to be properly classified as exempt. This means that any worker paid under $47,476 must be paid overtime and be provided with rest breaks beginning December 1, 2016.

The new law means that many exempt employees will be getting a pay raise to $47,476 or more beginning December 1, 2016, or will be converted to hourly-paid employees. However, many employers may not change their policies in light of the new law.

Retaliation is a very misunderstood concept in employment law. Much like the terms “wrongful termination” and “harassment”, the legal definition of “retaliation” is narrower than the common definition.

As commonly understood, retaliation in employment means any form of employer-revenge as a result of the employee speaking out over any workplace issue.

Legally speaking, retaliation is only illegal if the employee engaged in “protected activity”. Not all activities are protected against retaliation. There are dozens of types of protected activities in employment law. The most common forms of protected activity are good faith complaints of unlawful discrimination based on the employee’s disability or health condition, requests for health accommodation, pregnancy, gender, race, religion, sexual orientation and other legally protected characteristics.

As an example of un-protected activity, take the case of Julia. Julia has worked as a nurse for five years for Franciscan Hospital in Santa Cruz, California on it’s prestigious cancer treatment ward. Julia is passionate about treating patients with cancer. Unfortunately, Julia gets a new manager, Bob, who abruptly reassigns Julia to the hospital’s incredibly boring podiatry unit. Julia is miserable in the podiatry unit. She repeatedly complains to management and says that her work is “boring”, that it “doesn’t effectively use her skill set” and that “the job stinks”. Eventually, Bob gets tired of Julia’s complaints, and at the end of the year recommends that the hospital terminate Julia’s employment.

Unfortunately nurse Julia does not have a case for retaliation against the hospital. Did Bob the supervisor act morally and ethically in taking away her beloved job on the cancer ward? Probably not. Did Bob most efficiently apply Julia’s skill set at work? Nope. Was it vengeful, mean, and immature for Bob fire Julia after she complained? Absolutely. However, Julia still does not have a case for retaliation because she did not engage in protected activity.

As an example of activity that is protected against retaliation, let’s change the facts and imagine that nurse Julia suffers from diabetes. Nurse Julia has to take daily ten-minute breaks during work to take insulin and test her blood sugar to manage her diabetes. She must also regularly take time during the workweek to attend doctor appointments. Unfortunately, Julia’s new manager, Bob cannot stand Julia’s time away from work and issues her a poor performance review. Bob specifically gives Julia a one-star ranking in the categories of “attendance” and “teamwork” and writes “Julia should manage her health condition on her own personal time, not at work.”

After receiving the poor performance review, Julia submits a written complaint to Bob and the hospital’s CEO about Bob’s comments and states, “I’m being discriminated against because of my diabetes…” and “I will need periodic breaks from work to manage my diabetes.” After receiving the complaint, the hospital CEO fires Julia because he does not want a “complainer” working for him.

Julia has a great case for unlawful retaliation. Julia engaged in protected activity by complaining about Bob’s discriminatory conduct and by requesting a reasonable accommodation to manage her health condition. Julia would be entitled to reinstatement, economic, and emotional distress damages under California’s Fair Employment and Housing Act.

Are you an Aptos, Santa Cruz, Watsonville, or Monterey County employee experiencing retaliation at work? Call the Law Office of Brian Mathias before you are terminated for a free consultation.

All “non-exempt” employees are entitled to legally protected work breaks. A non-exempt employee is typically a non-managerial level employee, an employee who performs a physical job, or any employee who earn less than $41,600 per year. In contrast, an “exempt” employee will typically work in management or will have specialized job or background. An employee may earn much more than $41,000 per year still be considered “non-exempt.”

Numerically, most employees are non-exempt and are entitled to take protected breaks. An employee’s “classification” as exempt or non-exempt is a very fact-intensive analysis that depends on what the employee spends the majority of his or her time doing.

Employers regularly misclassify their employees. Employers have a financial incentive to classify employees as “exempt” to avoid the obligation to provide legally required breaks and to avoid paying overtime. And many employers simply do not know how rigorous their obligations are under California law. For these reasons, many employees are not provided with rest and meal breaks when they should be.

What are protected rest and meal breaks?

There are three types of protected breaks in California: rest breaks, meal periods, and recovery periods.

Rest Breaks:

Rest breaks are the most common form of legally protected break. All non-exempt employees are entitled to one, paid 10-minute rest break for every four hours worked. Most importantly, the rest break must be “duty-free”. A duty-free rest break means that the employee is not doing any work for the employer.

Meal Periods and Lunch Breaks:

Meal periods or lunch breaks are the next most common type break. One unpaid, half-hour meal period must be provided for every five hours worked. Like rest breaks, the employee must be given a realistic and meaningful opportunity to take a “duty-free” meal period. This means that employees must be permitted to leave work and be completely free of any work obligations. Employees who are required to take their lunch break at their desk are not being provided with a duty-free meal period.

Recovery or Cooldown Periods:

California also requires employers to provide five minute recovery periods or “cooldown periods” or “shade breaks” to employees who work outside in high temperatures. The purpose of this type of break is to prevent heatstroke illness. Recovery periods are the least most common form of protected break because they only apply to employees who work outdoors and in the heat, such as construction workers, agricultural workers, and landscaping employees.

What happens if an employee is deprived of their breaks?

Employers owe their employees penalties if the employee is deprived of the opportunity to take legally protected breaks. One such penalty is called a meal or rest break premium—equivalent to one additional hour’s pay at the employee’s regular rate of pay for missed breaks, up to two hours per day. These penalties can add up to thousands of dollars, especially for employees who have been deprived of their breaks for a long period of time.

As an illustration, take the case of José the bartender. José works as a bartender at a popular bar in downtown Santa Cruz. José works five nights per week from 4:30 p.m. to 2:30 a.m. and is paid $15.00 per hour. José works with one other bartender, Mike. Mike and José are the only employees on site at the bar. The bar is very popular among UCSC students and patrons are lined up at the bar waiting to buy drinks all night long. José has been repeatedly told by the bar’s owner, Jared, under no circumstance should any patron wait longer than 5 minutes at the bar for a drink.

Given the bar owner’s instructions to José about customer wait times, the bar’s popularity, and the understaffing, Jose never has the opportunity to take a duty free break at work.Unfortunately, José is abruptly terminated after he presses the wrong button on the credit card machine, resulting in a loss of hundreds of dollars to the bar.

José does not have a case for wrongful termination. However, he does have a great case for failure to provide rest and meal breaks. Since José worked ten hours per shift, he should have received two duty-free half hour meal periods and two duty-free 10-minute rest breaks. José can get the maximum penalty of two hours additional pay for every day that he was deprived two or more breaks; $30.00 per day. That totals $7,800 per year going back up to four years, or $31,200.

After unpaid overtime, interest, and state penalties are factored in, José’s damages are in excess of $100,000.

Are you a Santa Cruz, Monterey, or Salinas employee who can’t get a break at work? Contact the Brian Mathias Law. Se habla español.

Unemployment benefits are offered through California’s Employment Development Department (called the “EDD”). Employers pay a tax to the EDD for every one of their employees. That tax covers, in part, unemployment insurance benefits paid to eligible terminated employees. The purpose of the tax is to provide the employee with some compensation while unemployed.

How much do benefits pay?

Benefits do not pay as much as you earned at your old job. Benefits range from $50.00 per week to $1,129.00 per week. It all depends on the amount paid while employed. High-wage earners get paid more than minimum wage earners. Benefits last up to one year. Benefits are now paid to the employee through an individual debit card at Bank of America, not by check.

Can I get benefits if I was fired “for cause”?

In most cases, yes. Unemployment benefits are not paid to employees fired for “misconduct.” However, the legal definition of “misconduct” is narrow. Misconduct is more similar to deliberate and obvious wrongdoing. Examples may include drinking on the job, falsifying records, stealing from an employer, fighting with other employees, and insubordination. Ordinary poor performance, employee mistakes, and most “for cause” terminations do not justify a denial ofbenefits.

As an illustration, Arnie is a construction worker for Wave City Construction in Santa Cruz. Arnie is assigned the job of digging post holes for a residential fencing job. Arnie is clearly and repeatedly told by his boss, Gilbert, to not break any underground water and gas pipes. Arnie is even provided a metal detector to locate the pipes in advance. Unfortunately, Arnie ruptures a water line. The customer is very upset and terminates its large contract with Wave City Construction. Arnie truthfully admits to his mistake, but Gilbert fires Arnie on the spot.

Was Arnie fired for cause? You bet. Did Arnie make a very expensive mistake? Sure. Did Arnie deserve to get fired? Probably. However, Arnie would still be eligible for unemployment benefits because his poor performance does not sink to the level of misconduct.

What does the employee need to do to receive and keep getting benefits?

First, an employee must apply for benefits, which can be done online. Then an employee must actively look for a new job and be “able and available” to accept work. An employee’s job search efforts are tracked by the EDD through a form provided by the EDD that needs to be completed and signed every week.

It is critical that employees honestly and accurately document their efforts to find a new job and that they timely return any information to the EDD.

If an employee locates “suitable employment” in his or her customary line of work, the employment benefits cease.

What should I do if my benefits are denied?

Even though most employees are eligible to receive benefits, benefits are sometimes denied by EDD. There are typically three reasons behind the denial of benefits. First, the EDD is the perhaps the largest, busiest, and most unruly bureaucracy in California. The first line employees at EDD will often spend just a few minutes on a case before deciding to approve or deny benefits. The employees at EDD can make mistakes leading to a denial of benefits.

Second, vindictive or cheap employers will often contest an employee’s right to benefits. Some employers will provide false information to the EDD about poor performance or misconduct to cause a denial of benefits. Employers also have a financial incentive to contest your benefits.

Third, the denial could have been legitimate. For example, benefits could be properly denied if an employee voluntarily quits their job.

If benefits are denied, you should immediately contact an employment law attorney to help you. In the process of answering your questions about unemployment benefits, an employment law attorney may be able to identify valuable claims for wrongful termination or unpaid overtimethat you never knew you had.

Employees have thirty days to appeal a denial of benefits. Employees will then have an opportunity to present their case in-person to an administrative law judge in a mini-trial. The trial is held in an office-like environment at one of the many EDD facilities, including one in Salinas (for Monterey-based employees) and one in San Jose (for Santa Cruz-based employees).

Are you a Monterey, Salinas, San Benito, or Santa Cruz County employee who has been terminated? Contact the Law Office of Brian Mathias for a consultation.

Terminated employees in California are often handed multiple documents from their employer upon termination. These papers will commonly include a three to ten-page “Severance Agreement”. Understanding the ramifications of a Severance Agreement, especially in the emotional blur of a termination, is very difficult without help.

So what is a Severance Agreement?

In plain English a Severance Agreement is a contract between an employer and a soon-to-be terminated or an already terminated employee. In the contract, the employer agrees to pay the employee money in exchange for a promise from the employee never to sue the employer. That’s the basic idea.

The amount of money offered—or negotiated—between the employer and the employee may range from several thousand dollars to tens of thousands of dollars. The amount offered depends on the employer’s actual or perceived exposure to a lawsuit from the employee, the employee’s salary, their length of employment, as well as other factors.

For legal background, no California law requires private employers to offer a Severance Agreement. Unless previously obligated under contract, employers are legally permitted to fire employees and offer them $0.00 in Severance.

So then, why would employers want to pay more money to an employee that they have already decided to fire? Well, because it requires employees to give up something very valuable in return: the right to sue.

Employees have a host of legal rights in California. These rights include the right to not be terminated for an illegal reason, such as a discriminatory or retaliatory reason. It also includes the right to be paid overtime in many situations. Employers who violate employment laws face expensive and drawn out lawsuits. But not if the employer can get the employee to sign a Severance Agreement. That’s why an employer wants you to sign the Severance Agreement.

If offered a Severance Agreement, employees should not sign the agreement without knowing if they have a legal claim against their employer and the value of those claims. The only way to do that is to contact an employment law attorney. Plaintiffs’ employment law attorneys often provide a discounted initial consultation to review Severance Agreements.

As a hypothetical but common example, let’s take the case of Ryan. Ryan works at a bustling restaurant in Monterey as a waiter. Ryan is given the job “Front House Manager”. Ryan regularly arrives at work at 10:00 a.m. and does not leave until 11:00 p.m. Despite Ryan’s title, Ryan spends just 10% of his time managing other employees. 90% of Ryan’s time is spent cleaning and waiting tables. Ryan is never paid overtime, despite working 13 hours per shift. Nor is Ryan provided the opportunity to take duty-free rest and meal breaks.

After a particularly long shift, Ryan asks the hotel owner about getting overtime pay. In response, the employer angrily tells Ryan, “You should be thankful to have a job at all! I’m not paying you overtime.” When Ryan shows up the next day, he is fired and is handed a Severance Agreement offering $2,500.

Luckily, Ryan immediately calls an employment law attorney. During a free initial phone consultation, Ryan is surprised to learn that he has three potentially large claims against his former employer: an overtime claim worth $45,000; a meal and rest break case worth $6,000; and a retaliation case for firing him in response to asking for overtime. After Ryan learns that he has a case worth $75,000, he refuses to sign the Severance Agreement.

Ryan may now negotiate for a greater amount of money in the Severance Agreement, or proceed with a lawsuit against his employer.

Are you a Monterey, Salinas, or Santa Cruz County employee who has been offered a Severance Agreement? Contact the Law Office of Brian Mathias for a consultation.

Employers and employees frequently believe that if the employee is paid a salary, the employee is automatically disqualified from overtime. This is not the legal case at all.

For legal background, there are two methods of paying an employee. One is by salary, typically paid every two weeks, resulting in a set amount paid per year (ex: $60,000). The other is “hourly” where the employee is paid a wage for every hour worked (ex: $15.00 per hour).

Next, employees are placed into two legal categories or “classifications”. The first classification is called “non-exempt”. A non-exempt employee isentitled to time-and-a-half for any hours worked in excess of eight per day or forty per week and other protections. The second employee classification is called “exempt”. Exempt employees are not entitled to overtime. If a properly classified exempt employee works 60 hours per week, they are not entitled to an additional twenty hours of overtime pay.

The process of properly classifying employees as “exempt” or “non-exempt” can be legally and factually intensive. It depends on a variety of factors. Most important is the employee’s actual job duties and what the employee spent 51% or more of their time at work doing. Other factors include the employee’s level of responsibility, the amount of discretion given to the employee to perform their job, whether the employee performs manual labor, and whether the employee manages others. One factor is whether the employee is paid hourly or by salary.

Employers often oversimplify the process and only look at the salary requirement, and ignore the other factors when classifying employees.

As an illustration, let’s take the case of Ann. Ann is 5-year assistant manager at the Santa Cruz grocery store, Veggies-R-Us. Ann makes a salary of $45,000. Even though Ann averages 12 hours per day and 60 hours per week, she is not paid any overtime.

Ann spends the majority of her day stocking the shelves at Veggies-R-Us and working as a cashier. Ann’s job as an assistant manager requires her to supervise lower-level employees, which takes about 20% of her overall time. However, Ann has no authority or input in the hiring and firing process of the employees she supervises. One day, Ann is fired on the mistaken belief that she stole a box of broccoli. Ann then calls a lawyer complaining of wrongful termination.

Ann would not have a case for wrongful termination. (See my other article “What is Wrongful Termination?”). However, Ann would have a great case for employee misclassification and for unpaid overtime.

Ann spent more than 51% of her time stocking shelves and working as a cashier, both non-exempt activities under the California Labor Code. Only a fraction of her overall time was spent supervising other employees. Additionally, Ann did not have any true discretion or “independent judgment” over how lower-level employees were hired or fired.

While it’s true that Ann’s job title is that of “assistant store manager”, job titles are irrelevant in determining employee-classification and whether overtime is owed. Ann was not a true manager.

Veggies-R-Us will correctly argue that Ann was a “salaried employee”. However, paying Ann on a salaried basis is just one of many factors in determining Ann’s correct classification. Ann does not fall within any of California’s recognized exempt classifications.

Ann has a great case for overtime. She is entitled for up to three-years’ overtime (time-and-a-half) going back three years. That would be about $32.00 per hour for each hour of overtime worked, or $96,000 for the last three years. Ann is also entitled to a host of penalties, money for missed rest and meal breaks, interest on unpaid overtime. Ann has a case in excess of $125,000.

Are you a Monterey, Salinas, or Santa Cruz County employee like Ann who works long hours but receives no overtime pay? Contact the Law Office of Brian Mathias for a consultation.